UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
_________________________________________________
FOR ANNUAL REPORTS OF EMPLOYEE STOCK
PURCHASE SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| | | |
| þ | | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
| | | For the fiscal year ended December 31, 2010 |
| |
| or |
| |
| o | | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | | For the transition period from ____________ to ____________ |
Commission file number: 1-10006
| | |
| A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
Frozen Food Express Industries, Inc.
401(k) Savings Plan
| | |
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
Frozen Food Express Industries, Inc.
1145 Empire Central Place
Dallas, Texas 75247
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
TABLE OF CONTENTS
| | | | |
| | | Page No. | |
| | | | | |
| (a) Financial Statements and Supplemental Schedules | | | | |
| Report of Independent Registered Public Accounting Firm | | | 1 | |
| Statements of Net Assets Available for Plan Benefits at December 31, 2010 and 2009 | | | 2 | |
| Statements of Changes in Net Assets Available for Plan Benefits, for the Years ended December 31, 2010, 2009 and 2008 | | | 3 | |
| Notes to Financial Statements | | | 4 | |
| Schedule H, Part IV, Line 4i-Schedule of Assets (Held at End of Year) as of December 31, 2010 | | | 12 | |
| Schedule H, Part IV, Line 4i-Schedule of Assets (Acquired and Disposed of Within the Year) as of December 31, 2010 | | | 13 | |
| Schedule H, Part IV, Line 4i-Schedule of Reportable Transactions as of December 31, 2010 | | | 14 | |
| Signatures | | | 15 | |
| Exhibit 23--Consent of Waters, Vollmering & Associates, LLP | | | | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Administrative Committee of the Savings Plan for
Employees of Frozen Food Express Industries, Inc.:
We have audited the accompanying statements of net assets available for plan benefits of the Frozen Food Express Industries, Inc. 401(k) Savings Plan (the "Plan") as of December 31, 2010 and 2009, and the related statements of changes in net assets available for plan benefits for each of the three years in the period ended December 31, 2010. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Frozen Food Express Industries, Inc. 401(k) Savings Plan, as of December 31, 2010 and 2009, and the changes in net assets available for plan benefits for each of the three years in the period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules on pages 11, 12 and 13, together referred to as “supplemental information”, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the United States Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental information is the responsibility of the Savings Plan’s management. The supplemental information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Waters, Vollmering & Associates, LLP
Waters, Vollmering & Associates, LLP
Mansfield, Texas
June 21, 2011
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 2010 and 2009
(Amounts in thousands)
| | | 2010 | | | 2009 | |
| Investments (at fair value) | | $ | 18,760 | | | $ | 17,636 | |
| Participant notes receivable | | | 1,462 | | | | 1,323 | |
| Employer contributions receivable | | | - | | | | 6 | |
| Employee contributions receivable | | | 169 | | | | 196 | |
| Other | | | 104 | | | | 110 | |
| Total investments | | | 20,495 | | | | 19,271 | |
| | | | | | | | | |
| Less: | | | | | | | | |
| Benefits payable | | | 3,217 | | | | 2,534 | |
| | | | | | | | | |
| Net assets reflecting all investments at fair value | | | 17,278 | | | | 16,737 | |
| Adjustment from fair value to contract value for fully benefit-responsive investment contracts | | | (10 | ) | | | 65 | |
| Net assets available for plan benefits | | $ | 17,268 | | | $ | 16,802 | |
See accompanying notes and report of independent registered public accounting firm.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Years Ended December 31, 2010, 2009 and 2008
(Amounts in thousands)
| | | 2010 | | | 2009 | | | 2008 | |
| Investment income: | | | | | | | | | |
| Dividend income | | $ | 408 | | | $ | 285 | | | $ | 709 | |
| Interest income | | | 68 | | | | 82 | | | | 113 | |
| | | | 476 | | | | 367 | | | | 822 | |
| | | | | | | | | | | | | |
| Administration expense | | | (29 | ) | | | (43 | ) | | | (44 | ) |
| Realized gain (loss) | | | (243 | ) | | | (686 | ) | | | (390 | ) |
| Net unrealized appreciation (depreciation) in market value of investments | | | 2,675 | | | | (350 | ) | | | (4,213 | ) |
| Employee contributions | | | 1,291 | | | | 1,470 | | | | 1,988 | |
| Employer contributions | | | - | | | | 53 | | | | 254 | |
| | | | 3,694 | | | | 444 | | | | (2,405 | ) |
| | | | | | | | | | | | | |
| Decrease in fair market value of plan benefits payable to participants | | | (3,704 | ) | | | (1,830 | ) | | | (5,870 | ) |
| Net increase (decrease) | | | 466 | | | | (1,019 | ) | | | (7,453 | ) |
| Net assets available for plan benefits at beginning of year | | | 16,802 | | | | 17,821 | | | | 25,274 | |
| Net assets available for plan benefits at end of year | | $ | 17,268 | | | $ | 16,802 | | | $ | 17,821 | |
See accompanying notes and report of independent registered public accounting firm.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
(Amounts in thousands)
1. Description of the Savings Plan
The Frozen Food Express Industries, Inc. 401(k) Savings Plan (the "Savings Plan") is a defined contribution plan covering substantially all employees of Frozen Food Express Industries, Inc. ("FFEX") and its wholly-owned subsidiaries (the "Employer"). The Savings Plan is designed to comply with the Employee Retirement Income Security Act of 1974 ("ERISA") and to allow employees the option of investing in common stock of FFEX or in other investment funds designated by the Savings Plan committee (the "Savings Committee"). Participants should refer to the Savings Plan agreement for a more complete description of the Savings Plan's provisions.
Contributions - Participants may elect to contribute to the Savings Plan through periodic payroll deductions, subject to limits defined by the Savings Plan. Participants may also make a rollover contribution from other qualified plans or rollover IRA. The Company matching contribution was suspended on April 6, 2009. Previously it was equal to 25% of the executive contribution each pay period up to a maximum of 1% of executive salary.
Employee contributions, excluding rollovers, amounted to $1,241, $1,391 and $1,917 in 2010, 2009 and 2008, respectively. In addition, Employer cash contributions to the Savings Plan amounted to $0, $53 and $254 in 2010, 2009 and 2008, respectively.
Eligibility - An employee who completes 90 days of employment with the employer may enter the Savings Plan on the first business day of the month thereafter.
Participants' Accounts - Each participant account is credited with the participant's contributions and an allocation of (a) the employer's contributions, and (b) plan earnings. Allocations of plan earnings are based on participants' account balances, allocations of employers' contributions are based on participants' quarterly contributions.
Participant Notes Receivable - Participants may borrow from their fund accounts in an amount not to exceed the lesser of $50,000 or 50% of the Participant's vested account balance. Loan transactions are treated as a transfer between the investment fund and the Participant Notes Receivable. Loan terms range from one to five years, or up to ten years for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a reasonable rate as determined by the Savings Committee. The interest rates charged for loans made in 2010, 2009 and 2008 ranged from 4.25% to 8.25%. Principal and interest payments are due in substantially level amortized payments, payable not less than quarterly, through payroll deductions.
Vesting - Upon termination of employment, participants are entitled to receive 100% of their own contributions and any earnings thereon. Participants' benefits from Employer contributions begin to vest upon two years of credited service and vest 100% upon six years of credited service as defined by the Savings Plan.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS — (Continued)
Investment Options - During each of the three years ending December 31, 2010, participants could direct employee contributions in any of ten investment options, as follows:
| · | Stable Value Fund - The fund invests in assets whose principal value remains stable regardless of stock and bond market fluctuations. The Savings Committee has selected the ABN AMRO Income Plus D Fund as the investment vehicle for this fund. |
| · | Intermediate Bond Fund - The fund invests in fixed-income securities including corporate bonds, U.S. government securities, mortgage-related securities, and money-market instruments. The Savings Committee has selected the PIMCO Total Return Institutional Fund as the investment vehicle for this fund. |
| · | Mixed Investment Fund - The fund may invest a large portion of its assets in common stock and convertible securities. Prospective dividends and earnings are major considerations in these purchases. The Savings Committee has selected the Principal Investors Lifetime Preferred Funds as the investment vehicle for these funds. |
| · | Stock Index Fund - The fund attempts to replicate the aggregate return and risk of the Standard & Poor's 500 index. The fund will purchase all, or a representative sample of all the stocks held in the S&P 500 index. The Savings Committee has selected the Principal Global Investors S&P 500 Index Fund and the Principal Trust Company S&P 500 Index Fund as the investment vehicle for this fund. |
| · | Large Cap Growth Stock Fund - The fund seeks capital appreciation by investing primarily in securities that are expected by the fund to grow at an above average rate. The Savings Committee has selected the Columbus Circle LargeCap Growth R5 Fund as the investment vehicle for this fund. |
| · | Large Cap Value Stock Fund - This fund seeks capital appreciation by investing in large companies that are currently considered by the fund to be undervalued or demonstrate growth in earnings and revenue. The Savings Committee has selected the Van Kampen Growth and Income A Fund as the investment vehicle for this fund. |
| · | Small Growth Stock Fund - The fund invests primarily in common stocks of companies whose earnings are growing at an accelerating rate. The Savings Committee has elected the AllianceBernstein/CCI Small-cap Fund as the investment vehicle for this fund. |
| · | Small Cap Value Stock Fund - The fund seeks capital growth by investing in small-sized companies that are currently considered by the fund to be undervalued or demonstrate growth in earnings and revenue. The Savings Committee has selected the Delaware Small Cap Value A Fund as the investment vehicle for this fund. |
| · | International Stock Fund - The fund invests primarily in stocks and debt securities of companies and governments outside the United States. The Savings Committee has selected the Artio International Equity A Fund as the investment vehicle for this fund. |
| · | Frozen Food Express Industries, Inc. Common Stock Fund – the fund invests in the common stock of FFEX. |
Administration - The Savings Plan is administered by a committee appointed by the Board of Directors of FFEX. Administrative expenses not paid by FFEX are paid by the Savings Plan. During 2010, 2009, and 2008 FFEX paid administrative expenses of $124, $138, and $74 respectively.
Termination of the Plan - While the employer has not expressed any intent to discontinue its contributions, employers are free to discontinue contributions and FFEX may terminate the Savings Plan at any time. If terminated, net assets of the Savings Plan would be distributed to participants and beneficiaries as prescribed by the terms of the Savings Plan, in accordance with ERISA. Upon termination of the Savings Plan, participants' accounts become 100% vested.
Payment of Benefits – On termination of service due to death, disability or retirement, a participant may elect to receive either a lump-sum amount equal to the value of the participant’s vested interest in his or her account or annual installments over a period of time. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution.
Forfeited accounts - During 2010, 2009 and 2008, employer expenses were reduced by $13, $29 and $39, respectively, from forfeited non-vested accounts.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS — (Continued)
2. Summary of Significant Accounting Policies
Basis of accounting - The financial statements of the Savings Plan are prepared under the accrual method of accounting.
Accounting estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Savings Committee to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual outcomes may vary from these estimates.
Valuation of investments – Investments are valued based on the quoted market price on the last day of the year or on contract value (Note 7). The difference between current market value and cost of the investment is reflected in the statement of changes in net assets available for plan benefits by investment fund as net unrealized appreciation or depreciation in market value of investments. Where there are no readily available last traded or current bid prices, fair value estimation procedures used in determining asset values might cause differences from the values that would exist in a ready market due to the potential subjectivity in the estimates. Following is a description of the valuation methodologies used for assets measured at fair value.
Frozen Food Express Industries, Inc. Common Stock – Frozen Food Express Industries, Inc common stock is valued at the closing price reported on the Nasdaq Stock Market’s Global Select market.
Mutual Funds – Mutual Funds are investment vehicles stated at fair value based on quoted market prices reported by the Trustee.
Participant Loans – Loans to plan participants are valued at cost plus accrued interest, which approximates fair value.
Risks and Uncertainties – The plan utilizes various investment instruments, including mutual funds, money market funds, and common stock. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported on the financial statements.
Purchases, Sales and Dividend Income – Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS — (Continued)
3. Net Asset Values
The following table presents the net asset values of each investment fund as of December 31, 2010 and 2009:
| | | (amounts in thousands) | |
| | | 2010 | | | 2009 | |
| Frozen Food Express Industries, Inc. Common Stock, 1,091,701 shares and 1,164,577 shares, respectively. | | $ | 3,877 | (1) | | $ | 3,014 | (1) |
| ABN AMRO Income Plus D Fund, 386,213 shares and 457,161 shares, respectively. | | | 2,674 | (1) | | | 3,229 | (1) |
| PIMCO Total Return Institutional Fund, 236,340 and 225,571 shares, respectively. | | | 1,869 | (1) | | | 1,829 | (1) |
| Principal Global Investors: | | | | | | | | |
| Lifetime Income, 7,408 shares and 9,869 shares, respectively. | | | 50 | | | | 76 | |
| Lifetime 2050, 9,052 shares and 2,021 shares, respectively. | | | 101 | | | | 20 | |
| Lifetime 2040, 30,034 shares and 34,352 shares, respectively. | | | 306 | | | | 318 | |
| Lifetime 2030, 84,149 shares and 86,044 shares, respectively. | | | 849 | (1) | | | 855 | (1) |
| Lifetime 2020, 103,399 shares and 92,593 shares, respectively. | | | 1,103 | (1) | | | 943 | (1) |
| Lifetime 2010, 22,867 shares and 43,367 shares, respectively. | | | 247 | | | | 423 | |
| Principal Global Investors S&P 500 Index R5 Fund, 132,299 shares and131,040 shares, respectively. | | | 898 | (1) | | | 766 | |
| Columbus Circle LargeCap Growth R5 Fund, 87,257 shares and 109,513 shares, respectively. | | | 658 | | | | 693 | |
| Van Kampen Growth & Income A Fund, 66,509 shares and 76,960 shares, respectively. | | | 1,048 | (1) | | | 1,162 | (1) |
| Artio International Equity A Fund, 43,749 shares and 46,865 shares, respectively. | | | 1,013 | (1) | | | 1,078 | (1) |
| AllianceBernstein/CCI SmallCap Growth I R5 Fund, 62,298 shares and 69,434 shares, respectively. | | | 620 | | | | 510 | |
| Delaware Small Cap Value A Fund, 15,983 shares and 20,809 shares, respectively. | | | 493 | | | | 563 | |
| | | $ | 15,806 | | | $ | 15,479 | |
| Computational notes: |
| (1) | Investments that represent 5 percent or more of the fair value of the Plan’s net assets available for benefit. |
During 2010, the Savings Plan's investments increased in value by $327 as follows:
| | | (amounts in thousands) | |
| | | Appreciated/(Depreciated) | |
| Investments in Registered Investment Companies | | $ | 19 | |
| Frozen Food Express Industries, Inc. Common Stock | | | 863 | |
| ABN AMRO Income Plus Stable Value Fund | | | (555 | ) |
| | | $ | 327 | |
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS — (Continued)
During 2010, the Savings Plan's investments (including gains and losses on investments bought and sold, as well as investments held during the year) appreciated in value by $2,432 as follows:
| | | (amounts in thousands) | |
| | | Appreciate/(Depreciated) | |
| Investments in Registered Investment Companies | | $ | 1,179 | |
| Frozen Food Express Industries, Inc. Common Stock | | | 1,202 | |
| ABN AMRO Income Plus Stable Value Fund | | | 51 | |
| | | $ | 2,432 | |
4. Income Tax Status
The Savings Plan obtained its latest determination letter on January 8, 2008, in which the Internal Revenue Service stated that the plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The plan has been amended since receiving the determination letter. However, the plan administrator and the plan’s tax counsel believe that the plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been reflected in the Savings Plan's financial statements.
Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the plan and recognize a tax liability (or asset) if the plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The plan administrator has analyzed the tax positions taken by the plan, and has concluded that as of December 31, 2010, there are no uncertain positions taken or expect to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is no longer subject to income tax examinations for years prior to 2007.
5. Plan Amendment
During the plan year ended December 31, 2010 the Company did not make any plan amendments.
6. Fair Value Measurements
FASB Accounting Standard Codification Topic 820-10, formerly, Financial Accounting Standards Board Statement No. 157, Fair Value Measurements (SFAS 157), establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820-10 are described below:
| · | Level 1 - quoted market prices in active markets for identical assets or liabilities |
| · | Level 2 – inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities |
| · | Level 3 – unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities |
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS — (Continued)
As of December 31 2010 and 2009, the Plan’s investments measured at fair value consisted of the following instruments and classifications within the fair value hierarchy:
| | | (amounts in thousands) | |
| | | Fair Value Measurements as of December 31, 2010 Using Input Type | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Investments in Registered Investment Companies | | $ | 11,264 | | | $ | - | | | $ | - | | | $ | 11,264 | |
| Frozen Food Express Industries, Inc. Common Stock | | | 4,814 | | | | - | | | | - | | | | 4,814 | |
| ABN AMRO Income Plus Stable Value Fund | | | - | | | | 2,495 | | | | 187 | | | | 2,682 | |
| Total | | $ | 16,078 | | | $ | 2,495 | | | $ | 187 | | | $ | 18,760 | |
| | | (amounts in thousands) | |
| | | Fair Value Measurements as of December 31, 2009 Using Input Type | | | | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Investments in Registered Investment Companies | | $ | 10,752 | | | $ | - | | | $ | - | | | $ | 10,752 | |
| Frozen Food Express Industries, Inc. Common Stock | | | 3,843 | | | | - | | | | - | | | | 3,843 | |
| ABN AMRO Income Plus Stable Value Fund | | | - | | | | 2,813 | | | | 228 | | | | 3,041 | |
| Total | | $ | 14,595 | | | $ | 2,813 | | | $ | 228 | | | $ | 17,636 | |
The following tables reconcile the beginning and ending balances of fair value measurements using significant unobservable inputs (Level 3) of the ABN AMRO Income Plus Stable Value Fund’s guaranteed income contracts (GIC) for the years ended December 31, 2010 and 2009:
| | | (amounts in dollars) | |
| | | Traditional GIC’s | | | Wrapper Contracts | | | Total | |
| Balance as of December 31, 2009 | | $ | 223,586 | | | $ | 4,563 | | | $ | 228,149 | |
| Change in unrealized appreciation | | | 3,740 | | | | - | | | | 3,740 | |
| Purchases | | | 31,794 | | | | - | | | | 31,794 | |
| Sales and maturities | | | (76,679 | ) | | | - | | | | (76,679 | ) |
| Change in wrapper value | | | - | | | | 18 | | | | 18 | |
| Balance as of December 31, 2010 | | $ | 182,441 | | | $ | 4,581 | | | $ | 187,022 | |
| | | (amounts in dollars) | |
| | | Traditional GIC’s | | | Wrapper Contracts | | | Total | |
| Balance as of December 31, 2008 | | $ | 303,439 | | | $ | 13,689 | | | $ | 317,128 | |
| Change in unrealized appreciation | | | 2,281 | | | | - | | | | 2,281 | |
| Maturities | | | (82,134 | ) | | | - | | | | (82,134 | ) |
| Change in wrapper value | | | - | | | | (9,126 | ) | | | (9,126 | ) |
| Balance as of December 31, 2009 | | $ | 223,586 | | | $ | 4,563 | | | $ | 228,149 | |
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS — (Continued)
The Savings Plan employs the following approaches in valuing its investments:
| · | Investments in registered investment companies are valued using quoted market prices, as all have active markets. |
| · | The Frozen Food Express Industries, Inc. Common Stock and is valued using the quoted market prices on the Nasdaq Stock Market’s Global Select Market under the symbol: FFEX. |
| · | The ABN AMRO Income Plus Stable Value Fund invests in guaranteed investment contracts (GICs) issued by insurance companies and other financial institutions as well as debt or equity securities. In this fund, GICs are wrapper contracts used to mitigate the risk that the interest crediting rate does not result in a future interest crediting rate that is less than zero. An interest crediting rate less than zero would result in a loss of principal of accrued interest. |
7. Investment Contract within ABN AMRO Income Plus Stable Value Fund
In 2007, the Plan entered into a benefit-responsive investment contract with ABN AMRO Income Plus Stable Value Fund. The Fund invests primarily in investment contracts such as traditional guaranteed investment contracts (GICs) and enters into wrapper contracts with underlying securities to create synthetic GICs. The contract is included in the financial statements at contract value as reported to the plan by ABN AMRO. Contract value represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. The guaranteed investment contract issuer is contractually obligated to repay the principal and a specified interest rate that is guaranteed to the Plan.
As described in Note 2, because the guaranteed investment contract is fully benefit-responsive, contract value is the relevant measurement attribute for that portion of the net assets available for benefits attributable to the guaranteed investment contract.
Contract value, as reported to the Plan by ABN AMRO, represents principal amounts invested in the underlying investments, plus interest accrued at a crediting rate established under the contract, less any adjustments for withdrawals (as specified in the wrap agreement). Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.
There are no reserves against contract value for credit risk of the contract issuer or otherwise. The fair value of the investment contract at December 31, 2010 and 2009 was ($10) and $65, respectively. The crediting interest rate is based on a formula agreed upon with the issuer, but may not be less than 0%. Such interest rates are reviewed on a quarterly basis for resetting.
Certain events limit the Plan’s ability to transact at contract value with ABN AMRO. These events include termination of participating plans, or a material adverse change to the provision of participating plans. The plan administrator does not believe that any events that would limit the Plan’s ability to transact at contract value with the Plan participants are occurring.
Certain events are permitted for the issuer to initiate contract terminations. These events include the uncured loss of a participating plan’s tax qualified status, uncured material breaches of wrap contract by the Fund, or material and adverse changes to the provisions of the Fund.
| | | 2010 | | | 2009 | |
| Average Yields: | | | | | | |
| Ratio of year-end market value yield to investments (at fair value) | | | 2.60 | % | | | 2.85 | % |
| Ratio of year-end crediting rate to investments (at fair value) | | | 2.19 | % | | | 2.37 | % |
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS — (Continued)
8. New Accounting Pronouncements
In January 2010, the Financial Accounting Standards Board (“FASB”) issued guidance related to improving disclosures about fair value measurements. The new guidance requires separate disclosures of the amounts of transfers in and out of Level 1 and 2 fair value measurements and a description of the reason for such transfer. In the reconciliation for Level 3 fair value measurements using significant unobservable inputs, information about purchases, sales, issuances and settlements shall be presented separately. These disclosures were effective for the Plan on January 1, 2010, except for the disclosures related to the purchases, sales, issuances and settlements in the roll forward activity of Level 3 fair value measurements, which are effective on January 1, 2011, and was early adopted for the year ended December 31, 2010. The guidance requires additional disclosures, including reclassifying 2009 fair value measurements, but does not impact the Plan’s net assets available for the current year or prior year.
In September 2010, the FASB issued guidance clarifying how loans to participants should be classified and measured by defined contributions plans. Participant loans were previously classified as investments at fair value. The guidance requires that participant loans be classified as notes receivable from participants, which are segregated from the plan investments and measured at their unpaid principal balance plus any accrued but unpaid interest. This guidance was effective for the Plan in 2010, and was required to be applied retrospectively to the prior period presented. Accordingly, participant loan balances as of December 31, 2009, have been reclassified to conform with the presentation as of December 31, 2010.
9. Subsequent Events
The Plan has evaluated subsequent events after the Statement of Net Assets date of December 31, 2010. The Plan is not aware of any subsequent events that would require recognition or disclosure in the consolidated financial statements.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
PLAN 001
EIN 75-1031831
SCHEDULE H, PART IV, LINE 4i-SCHEDULE OF ASSETS
(HELD AT END OF YEAR)
December 31, 2010
(Amounts in thousands)
| | (a) Identity of Issue | | (b) Description of Investment (shares) | | | (c) Cost | | | (d) Current Fair Value | |
| * | Frozen Food Express Industries, Inc. Common Stock | | | 1,092 | | | $ | 4,946 | | | $ | 4,814 | |
| | ABN AMRO Income Plus D Fund | | | 386 | | | | 2,471 | | | | 2,682 | |
| | PIMCO Total Return Institutional Fund | | | 236 | | | | 2,542 | | | | 2,564 | |
| | Principal Global Investors: | | | | | | | | | | | | |
| | Lifetime Income | | | 7 | | | | 80 | | | | 78 | |
| | Lifetime 2050 | | | 9 | | | | 91 | | | | 102 | |
| | Lifetime 2040 | | | 30 | | | | 333 | | | | 353 | |
| | Lifetime 2030 | | | 84 | | | | 956 | | | | 974 | |
| | Lifetime 2020 | | | 103 | | | | 1,196 | | | | 1,201 | |
| | Lifetime 2010 | | | 23 | | | | 257 | | | | 255 | |
| | Principal Trust Company S&P 500 Index Fund | | | 132 | | | | 1,011 | | | | 1,177 | |
| | Columbus Circle LargeCap Growth R5 Fund | | | 87 | | | | 662 | | | | 720 | |
| | Van Kampen Growth & Income A Fund | | | 67 | | | | 1,234 | | | | 1,278 | |
| | Artio International Equity A Fund | | | 44 | | | | 1,453 | | | | 1,287 | |
| | AllianceBernstein/CCI Small-cap Fund | | | 62 | | | | 487 | | | | 660 | |
| | Delaware Small Cap Value A Fund | | | 16 | | | | 522 | | | | 615 | |
| | | | | | | | | 18,241 | | | | 18,760 | |
| | Loans to Participants | | Interest bearing notes at 4.25%-8.25% | | | $ | - | | | $ | 1,462 | |
* Party-in-interest to the Savings Plan
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
PLAN 001
EIN 75-1031831
SCHEDULE H, PART IV, LINE 4i-SCHEDULE OF ASSETS
(ACQUIRED AND DISPOSED OF WITHIN THE YEAR)
December 31, 2010
(Dollars in thousands)
(a) Identity of Issue | | (b) Description of Investment (shares) | | | (c) Cost | | | (d) Proceeds | |
| Frozen Food Express Industries, Inc. Common Stock Fund | | | | 166,441 | | | $ | 762 | | | $ | 567 | |
* These are total shares sold within the plan year, not necessarily just those shares acquired and disposed within the plan year.
All other investment assets that were both acquired and disposed of during the plan year were interests issued by a company registered under the Investment Company Act of 1940. Therefore, these transactions are excluded from this schedule in accordance with the Specific Instructions for Form 5500.
FROZEN FOOD EXPRESS INDUSTRIES, INC.
401(k) SAVINGS PLAN
PLAN 001
EIN 75-1031831
SCHEDULE H, PART IV, LINE 4j-SCHEDULE OF REPORTABLE TRANSACTIONS
December 31, 2010
(Dollars in thousands)
| | | | | Purchases | | | | |
(a) Identity of Party Involved | | (b) Description | | Shares/Units | | | (g) Cost | | | (h) Market Value | | | (i) Net Gain or (Loss) | |
| Frozen Food Express Industries, Inc. * | | Common Stock | | | 93,565 | | | $ | 336 | | | $ | 413 | | | $ | 77 | |
| ABN AMRO | | Stable Value | | | 77,531 | | | | 531 | | | | 536 | | | | 5 | |
| PIMCO | | Intermediate Bond | | | 62,412 | | | | 700 | | | | 677 | | | | (23 | ) |
| Principal | | Lifetime Income | | | 4,225 | | | | 44 | | | | 45 | | | | 1 | |
| Principal | | Lifetime 2050 | | | 8,491 | | | | 85 | | | | 96 | | | | 11 | |
| Principal | | Lifetime 2040 | | | 11,460 | | | | 122 | | | | 135 | | | | 13 | |
| Principal | | Lifetime 2030 | | | 23,945 | | | | 253 | | | | 277 | | | | 24 | |
| Principal | | Lifetime 2020 | | | 28,487 | | | | 306 | | | | 331 | | | | 25 | |
| Principal | | Lifetime 2010 | | | 7,214 | | | | 75 | | | | 80 | | | | 5 | |
| Principal | | Stock Index R5 | | | 23,224 | | | | 187 | | | | 192 | | | | 5 | |
| Columbus Circle | | Large-cap Growth | | | 15,391 | | | | 113 | | | | 127 | | | | 14 | |
| Van Kampen | | Large-cap Value | | | 10,402 | | | | 183 | | | | 200 | | | | 17 | |
| AllianceBernstein/CCI | | Small-cap Value | | | 16,153 | | | | 140 | | | | 171 | | | | 31 | |
| Delaware | | Small-cap Value | | | 3,570 | | | | 116 | | | | 137 | | | | 21 | |
| Julius Baer | | International Stock | | | 12,205 | | | | 334 | | | | 359 | | | | 25 | |
* Party-in-interest to the Savings Plan.
FROZEN FOOD EXPRESS INDUSTRIES, INC 401(k) SAVINGS PLAN
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Chairman of the Savings Plan Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| | |
| | Frozen Food Express Industries, Inc. |
| | 401(k) Savings Plan |
| | /s/ S. Russell Stubbs | |
| Date: June 23, 2011 | Name: S. Russell Stubbs Title: Chairman of Savings Plan Committee | |
